Unilever (ULVR) Status Update summary

Strategic transformation and focus

• Growth Action Plan 2030 emphasizes a simpler, more focused structure, prioritizing 30 Power Brands and 24 core markets, representing over 75% of turnover and 85% of revenue.

• Leadership team refreshed, with over 60% new executives and a quarter new to the company, bringing diverse external experience and driving a performance-oriented culture.

• Ice Cream business separation is on track, with operational separation expected by July 2025 and full separation by year-end, establishing a standalone model and new leadership.

• Portfolio simplification includes pruning over €1 billion in non-strategic foods and focusing on three core verticals: condiments, cooking aids/mini meals, and food solutions.

• €800 million productivity program targets a 17% reduction in white-collar workforce, impacting 7,500 roles globally, with one-third of reductions already achieved.

Operational and financial performance

• Achieved four consecutive quarters of positive volume growth, with Power Brands growing 5.6% year-to-date and representing over 75% of turnover.

• Gross margin has returned to pre-pandemic levels ahead of schedule, driven by productivity, procurement, and reinvestment in brands; EPS growth reached 16%.

• Guidance maintained for 3-5% top-line growth and modest margin expansion pre-Ice Cream separation, with ambition for mid-single digit growth and at least 2% volume growth post-separation.

• Capital allocation remains disciplined, with a 60% payout ratio target, continued buybacks if excess cash is available, and bolt-on M&A focused on the US and India.

• Cash conversion expected to remain around 100%, with leverage at ~2x EBITDA to maintain a strong credit rating.

Innovation, premiumization, and digital acceleration

• Shift to fewer, bigger, better innovations, with 12 major launches in 2024, each targeting €100 million incremental turnover; average innovation size has doubled since 2021.

• Premiumization is a key lever, with focus on upgrading core brands, scaling Prestige and Wellbeing, and rotating the portfolio toward premium segments, especially in North America and Europe.

• Social-first demand generation and digital commerce prioritized, with digital media spend in some brands rising from 20-30% to over 50-70%.

• AI and cloud investments underpin productivity, innovation, and marketing, including the launch of a €100 million digital-first fragrance house and autonomous supply chain operations.

• Brand superiority is measured across six Ps, with continuous tracking and targeted improvements.